From Colin Dyer
President and CEO
I spent my last day chairing a session presenting some excellent research led by David Rees, our Head of Research in Australia, our Head of Research in Australia, in conjunction with the World Economic Forum and supported by many of our researchers around the world. The subject was asset price dynamics – a smart way of saying real estate cycles and particularly real estate bubbles.
My job was to present the research to the group and then lead a discussion session. The panel consisted of a number of industry executives from around the world, and, notably, two central bank governors and two economics prize winners. As you can imagine, that was a daunting task!
Bottom line, the research document is impressive, and it earned universal approval for its conclusions and recommendations. You may find it interesting to review the 15 case studies on real estate bubbles through the years and around the world. It’s gripping reading.
Switching to some conclusions I got from the conversations I’ve had and sessions I was able to attend, the most important aspect concerns how the world economy feels today.
There are no issues in the U.S. The economy is robust, growing strongly and will be a motor for the world economy for the next two to three years.
In Europe, drawing largely from a session I attended today, attempts by the European Central Bank to pump liquidity into the region’s economies through quantitative easing are helpful but not sufficient to drive growth. There is a growing consensus that growth in Europe will only come through structural reform, particularly in the Southern European economies.
In Asia, India is clearly accelerating, China is slowing to a stable growth rate, and the rest of the region is working around that dynamic, with Australia following the China logic and Japan apparently responding quite well to Abenomics.
Put it all together, and what does it tell us?
If you go back 12 months to the time we were last in Davos, the world hadn’t heard of the Ukraine crisis, Ebola, ISIS or $50 oil. So all of those events, which could have been disruptive, have happened in the last year. Looking forward now, there are plenty of things you could worry about, including those four, as well as issues we don’t yet know about.
But in broad terms, the general sense here – and my sense too – is that there is no impediment to solid global growth across the world economy. And the world economy will continue to build on the existing momentum, for at least the coming two years.
On the subject of confidence, that was clearly the order of the day among business people in Davos. The confidence was not exuberant, but it was solid. It was as good as I’ve witnessed here since 2005. I can’t remember when opportunities and deal outlines were being offered with such spontaneity.
Thank you and we wish you an excellent business environment.
Davos Blog: JLL delegates Colin Dyer, Shelia Penrose, Herman Bulls, Christian Ulbrich, Anuj Puri and Jon Zehner posted real-time, brief, daily blogs throughout the conference on the Notes from Davos Blog.
LinkedIn: Get personal insights from Colin Dyer, from Davos and all-year round, by following and sharing his JLL LinkedIn Influencer updates.